If the labour supply is unchanged, an increase in the demand for labour will
A)increase the equilibrium wage and decrease the number of workers employed.
B)increase the equilibrium wage and increase the quantity of jobs demanded.
C)decrease the equilibrium wage and increase the number of workers employed.
D)increase the equilibrium wage and increase the number of workers employed.

Question

Quizplus · Accepted Answer

If the labour supply is unchanged and there is an increase in the demand for labour, the equilibrium wage will increase as employers compete to hire workers. As the wage increases, it will become more attractive for people to enter the labour market, which will increase the number of workers employed. Therefore, both the equilibrium wage and the number of workers employed will increase.

If the Labour Supply Is Unchanged, an Increase in the Demand